The Blog

Should I start automated investing?

By Andy Hayes

The Betterment Stock split dashboard.

The range of possible jobs post-college have skyrocketed since I graduated college. And with many people working from the internet, like me, it makes the traditional route to building wealth a bit trickier. I’ve worked as a self-employed freelancer since graduating college a decade ago. As such, I never started a 401(k) and I always thought that starting an IRA seemed overly complicated. That assumption though just meant I delayed a long time until, at age 26, I sat down with Schwab broker. Together we picked a ‘safe’ mutual fund, and I opened an IRA — my first long-term savings plan.

That was the beginning of my journey. A few years later, I used the free Wealth Calculator to assess my progress toward my retirement and long-term goals and was shocked to see that I needed to double my current monthly investing numbers to reach those goals.

I’ve read a lot in personal finance, and it seemed the next step for most people in a similar situation is an automated investing tool. And there are a lot out there!

I narrowed it down to these three; they’re the front-runners to cover most types of new savers looking to move into investing:

Acorns: If you’re just getting started on your wealth journey, this is ideal. There are no account minimums and they automatically invest spare change from everyday purchases into a diversified portfolio. If you don’t have a nest-egg yet, or you’re still mostly focused on reducing debt, this is the perfect option to start slowly with a regular but manageable savings habit.

Betterment: This is a mid-road option. You can start with no minimum account balance the fees are very low if you can set up an automated deposit of at least $100 per month. It’s ideal if you’re in the middle of your wealth journey and you want to invest little upfront cash but still have full automation and strong investment options.

Wealthfront: This company has rave reviews and is a solid choice if you having a nest-egg established and ready to move into long-term investments. They have an account minimum of $5,000, so they are ideal for the advanced wealth builder!

Betterment was that Goldilocks combination of “just right” for my situation, and here’s what I’ve loved about them in the months since I started using their automated investing platform.

Betterment Advantages

Ease of use: They have an open, clean interface with easy access to account and goal information. It’s broken down into layman’s terms so you can easily understand every aspect of your portfolio.